PDAC: How payment transparency helps gain a social licence to operate (Canadian Mining Journal – February 26, 2015)

 http://www.canadianminingjournal.com/

Corporate social responsibility is front-and-centre at this year’s Prospectors and Developers of Canada meeting. One not to be missed session about the ideas that will shape the future of CSR will be held Monday, March 2 from 3:30 to 5:00 pm in Room 717 of the Metro Toronto Convention Centre.

CMJ had an opportunity to talk with one of the presenters, O Trade founder Monica Ospina, about the importance of transparency in payment and its role in obtaining a social licence to operate.

CMJ: What does “transparency in payments” mean for the extractive industry?

MO: It means the open disclosure of all payments made to the government by the extractive industry on a project-by-project basis. The purpose is to inform people about payments of royalties and taxes by the industry and about the amounts received by their government.

A shift towards transparency in payments would also accompany legislative changes concerning the distribution of royalties. Specifically, governments would make clear how royalties and taxes could be distributed at the federal or national, regional and municipality levels. Such practices can be seen, for example, in Mexico, Colombia and Peru, where legislation has reshaped the way income is distributed and how democracy works at the grassroots level.

Read more

Platinum CEOs say mechanisation not a panacea – by David McKay (MiningMx.com – February 27, 2015)

 http://www.miningmx.com/

THE mechanisation of mines has become a buzzword in the South African mining sector construed as something of a panacea for investors especially in the platinum sector where estimates suggest two-thirds of production is still cash negative.

For unions, however, mechanisation implies looming job cuts. According to Chris Griffith, CEO of Anglo American Platinum (Amplats), the Anglo American listed subsidiary, mechanisation is neither quite of these things entirely, although he acknowledges there’s a long-standing debate on the effect of mechanisation and the impact on jobs.

“[I]t is common cause that better productivity is better for the economy,” said Griffith in a presentation at the Mining Indaba conference earlier this month. “Jobs don’t get lost – they get created in new areas,” he said, adding that mechanisation was “… a social and economic imperative”.

Tell that to Lonmin shareholders who witnessed the efforts of former CEO, Brad Mills, who pioneered mechanisation from about 2007 at the group’s operations with the intention of taking mining costs down to 35% of total costs from 65% at that time. It failed and cost him his job.

Said Griffith in an interview with Miningmx: “Mechanisation is not universal panacea; sometimes it’s not the solution. At Lonmin, it was at an early stage of mechanisation but we’ve had a long history since then.

Read more

BHP Sounds Warning as Casualties Mount in Iron Ore Price War – by Thomas Biesheuvel and Jesse Riseborough (Bloomberg News – February 24, 2015)

http://www.bloomberg.com/

(Bloomberg) — The first fractures are appearing in an escalating iron ore price war that’s putting more producers out of business.

The biggest mining companies led by Rio Tinto Group, BHP Billiton Ltd. and Vale SA have persisted with multi-billion dollar expansion plans, citing still-healthy earnings even in the wake of a price collapse. Now, for the first time, one of the big three has voiced concern they may have gone too far.

“I do fear that other competitors have an awful lot more capital waiting in the wings to invest in expanding,” Andrew Mackenzie, chief executive officer of BHP, the world’s largest mining company, told analysts on a conference call on Tuesday after reporting a 35 percent decline in underlying profit from his iron-ore division. “We do look to the future and see a degree of pressure downwards on iron-ore prices.”

BHP, Rio and Vale have been squeezing smaller rivals in their quest for market share, while demand growth in China, the biggest consumer, slows. From Sierra Leone’s jungle to Sweden’s Lapland, abandoned mines are beginning to dot the global landscape.

“They wanted to make sure no one else entered the market and to maximize their own market share,” said Seth Rosenfeld, an analyst at Jefferies International Ltd. in London. “They’ve now done that as they’re expanding and no one else is.”

Read more

Australian coal industry takes another step closer to the abyss – by Peter Ker (Sydney Morning Herald – February 27, 2015)

http://www.smh.com.au/

The downturn in the Australian coal industry has deepened, with three major mining companies warning on Friday that more jobs will be cut, mines will close and assets will be written down to a shadow of their former value.

Rio Tinto, Glencore and Brazilian miner Vale have all reiterated their pessimistic view of the coal sector’s future, revealing major changes to their local operations.

Glencore has made the most aggressive move, announcing that it will cut its Australian coal output by 15 million tonnes in 2015, or more than 20 per cent when compared to 2014 volumes.

In a move that is likely to put more than 100 jobs on the line, Glencore said the cuts would “more closely align” its coal output with customer demand, and some expansion projects would be slowed. “We will defer some projects and ensure that inventory management and blending are optimised,” the miner said in a statement.

The move comes less than a year after Glencore tried to merge its Australian coal division with Rio Tinto’s, underlining the predicament the Australian coal sector finds its self in.

Read more

Probe’s David Palmer our Mining Person of the Year – by Trish Saywell (Northern Miner – February 25, 2015)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

When the discovery of a new gold patch rocks the mining world, it is a wondrous thing. When the discovery is made in an underexplored area with no previously known precious metal deposits it’s even more exciting, and when the discovery stems, in part, from a simple good deed, it becomes extraordinary.

The tale of how David Palmer discovered the Borden Lake gold deposit and earned the prestigious Bill Dennis Award and title to The Northern Miner’s Mining Person of the Year for 2014 begins in 2003, about four years after he graduated from McGill University with a PhD in economic geology.

The geologist, whose PhD thesis focused on ore-forming hydrothermal fluids associated with carbonatites, was working for a junior, when a prospector he didn’t know by the name of Bob de Carle, pitched a nickel property called Sunday Lake, north of Thunder Bay.

The property didn’t fit the company’s model, so it passed. But Palmer thought it still held promise. His view was that the material just hadn’t been presented in the right way, which masked some of what he felt were its most interesting features. So he offered to spend some personal time reworking the geological data to improve the odds that de Carle — a geophysicist by training — could find success the next time he shopped it around.

Read more

Cash-strapped North Korea steps up mining output – by Anna Fifield (Washington Post – February 27, 2015)

http://www.washingtonpost.com/

SEOUL — The sharp fall in global commodity prices is starting to have an impact on North Korea, economists say, hurting a state that relies heavily on exports of minerals to keep its economy afloat — and its gargantuan military funded.

Combined with China’s economy coming off the boil, the recent slump in coal prices in particular could hurt Kim Jong Un’s “byungjin” policy: his stated desire to simultaneously develop North Korea’s economy and its nuclear weapons program.

“Commodity prices are dropping, so it’s becoming more and more difficult for North Korea to earn foreign currency,” said Choi Kyung-soo, president of the North Korea Resources Institute in Seoul. “I think last year, minerals trade decreased by about 10 percent by volume and about 15 percent by price.”

Mining makes up roughly 14 percent of the North Korean economy, which, although in a parlous state and under heavy financial sanctions, appears to have been growing modestly in recent years, when China still was booming and commodity prices still were surging.

Read more

Getting to Yes has never been tougher – by Jeffrey Simpson (Globe and Mail – February 27, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Mines and forest projects can face the same procedural snakes and ladders.
In Northern Ontario, the so-called Ring of Fire chromite deposits will be
tied up for years and years in environment reviews and aboriginal demands.
Already, the major U.S. company interested in developing the deposits has
walked away. Who could blame it? (Jeffrey Simpson – Globe and Mail)

Forget for a moment U.S. President Barack Obama’s doubts about the Keystone XL pipeline. Whether the President decides for or against the project shouldn’t deflect Canadians from asking within their own borders: How do we get to Yes?

Getting to Yes is becoming harder all the time. Fossil-fuel developments, pipelines, mines, dams, hydro-electric transmission lines and wind turbines are frequently contested, delayed or blocked.

Even when they’re approved, the process for getting to Yes can take so long that projects lose their economic rationale, as with the now-abandoned Mackenzie Valley gas pipeline, which shuddered to a halt after 10 years of review because the gas market had changed. Or, projects are postponed or killed because they face tough competition from overseas suppliers where approvals are not so protracted. Proposed liquefied natural gas projects in British Columbia face this very risk.

Read more

The Mongols were fearsome warriors… and big POLLUTERS: Kublai Khan’s silver mining dumped more heavy metals into the environment than modern industry – by Richard Gray (Daily Mail – February 27, 2015)

http://www.dailymail.co.uk/home/index.html

They were feared as barbarians who built one of the largest empires in the world from horseback, but it appears the Mongolian emperors were also some of the planet’s biggest polluters.

A new study into the silver mines of Kublai Khan, the grandson of Genghis Khan, shows that the people produced four times as much pollution as modern industrial mining activities.

It is thought to be one of the few examples where pre-industrial period pollution has exceeded modern day levels. Geologists from the University of Pittsburgh and the Chinese Academy of Sciences have found pollution from heavy metals like lead, zinc and cadmium spiked between 1271AD and 1368AD in the Yunnan region of south west China.

They say that this pollution was caused by large amounts of silver smelting driven by the Mongolian hunger for the precious metal, which they used to make coins, jewellery and art.

Writing in the journal Environmental Science and Technology, Aubrey Hillman, who led the work, said that the impact of this pollution was still being felt today by the wildlife and environment in the area.

Read more

  Giant Mine headframe set for demolition this summer – by Guy Quenneville (CBC News North – February 27, 2015)

http://www.cbc.ca/news/canada/north

Yellowknife city council abandons plans to take over Con Mine Robertson headframe

One landmark from Yellowknife’s gold mining past is close to disappearing for good, while the future of another is in limbo. Plans are underway to begin dismantling the iconic C-Shaft headframe at Giant Mine this summer, representatives from Aboriginal Affairs and Northern Development Canada said at a public meeting Thursday night.

It’s part of an early “site stabilization” phase of the remediation project triggered in 2013 by concerns about site safety. “People will definitely notice a difference,” said Jane Amphlett, an engineering manager with the project.

“We haven’t finalized the plan, but it’s likely that significant parts of the shaft will come down in the next year, and likely perhaps all of it will come down once [our engineers] finalize the actual plan for it.” Amphlett said the timber tower, which is at the centre of the clean-up site, poses a potential safety risk to remediation workers.

The smaller A-Shaft headframe, near the Yellowknife boat launch area and close to the intended site of a proposed N.W.T. Mining Museum, will also be taken down, though when has not be determined yet, Amphlett added.

Read more

Pebble Mine debate in Alaska: EPA becomes target by planning for rare ‘veto’ – by Joby Warrick (Washington Post – February 15, 2015)

http://www.washingtonpost.com/

Just north of Iliamna Lake in southwestern Alaska is an empty expanse of marsh and shrub that conceals one of the world’s great buried fortunes: A mile-thick layer of virgin ore said to contain at least 6.7 million pounds — or $120 billion worth — of gold.

As fate would have it, a second treasure sits precisely atop the first: the spawning ground for the planet’s biggest runs of sockeye salmon, the lifeline of a fishery that generates $500 million a year.

Between the two is the Obama administration, which has all but decided that only one of the treasures can be brought to market. How the White House came to side with fish over gold is a complex tale that involves millionaire activists, Alaska Natives, lawsuits and one politically explosive question: Can the federal government say no to a property owner before he has a chance to explain what he wants to do?

As early as this spring, the Environmental Protection Agency is expected to invoke a rarely used legal authority to bar a Canadian company, Northern Dynasty Minerals Ltd., from beginning work on its proposed Pebble Mine, citing risks to salmon and to Alaska’s pristine Bristol Bay, 150 miles downstream.

The EPA’s position is supported by a broad coalition of conservationists, fishermen and tribal groups — and, most opinion polls show, by a majority of Alaskans.

Read more

New Caledonia: Nickel – Market Insights – by Robert Trzebski (Australian Mining – Febraury 26, 2015)

http://www.miningaustralia.com.au/home

There are currently three key players in the nickel sector over in New Caledonia. French-owned ERAMET has been present in the country for over 120 years now and operate mines in New Caledonia through their subsidiary, SLN (Société Le Nickel).

They have in total five operations, which are mostly concentrated in the centre of the island at Kouaoua, Thio, Nepoui, and Tiebaghi, not to mention the biggest nickel processing plant in the world, Doniambo.
Vale are the second big player in town, and have the formidable Goro Nickel project under their ownership.

This mine is located in the South of the island. It began operations in August 2010, with over 55 million tonnes of estimated mineral reserve.

Estimated annual production is around 60,000 tonnes of nickel and 5,000 tonnes of cobalt. This is an open pit operation with a processing plant on site. The third and final significant player is SMSP in joint ownership with Glencore Nickel.

The Koniambo mine started open cut operations two years ago in the north of the country, again with a processing plant on site. Koniambo will be an important contributor to New Caledonia’s mining future, being a high-grade nickel deposit of 6.1 Mt of contained nickel that has a current forecast of 25 years of operations.

Read more

Light at the end of the tunnel – by Norm Tollinsky (Sudbury Mining Solutions Journal – February 24, 2015)

http://www.sudburyminingsolutions.com/

Ontario exploration spending continues slide, but several projects advance to mine development

Exploration and deposit appraisal expenditures in Ontario were down significantly in 2014 – no surprise to junior mining companies, geologists, drilling companies and manufacturers of drilling consumables. But the news wasn’t all bad as the New Year dawned.

Revised estimates published by Natural Resources Canada in September pegged exploration and deposit appraisal expenditures for Ontario at $509.5 million, less than half the amount spent in 2011 and down again from last year’s total of $562 million.

Ontario still leads all other provinces and territories with 24 per cent of spending in Canada, but that’s down from Ontario’s 30.8 per cent share registered in 2010.

Gold continued to be the predominant target, accounting for $416.3 million of total spending for the year. Grass roots exploration took most of the hit, though several of the most promising projects crossed the threshold from exploration to mine development. By late January, gold had rebounded from its October low of $1,140 and was sitting at just under $1300.

“We had a very good run from the early 2000s,” said Rod Thomas, president of the Prospectors and Developers Association of Canada. “China was growing at double digit rates and there was a huge demand for commodities starting around 2003 all the way to the financial crisis in 2008… but we bounced back and the industry did really well until around April 2012.”

Read more

Moosonee railway extension gaining momentum – by Len Gillis (Timmins Times – February 25, 2015)

http://www.timminstimes.com/

Mushkegowuk Grand Chief Lawrence Martin will be joining the chiefs of the Matawa Tribal Council at the annual prospectors’ convention in Toronto next week to outline his plans for a new railway line running from Moosonee to the Ring Of Fire mining project.

Martin said he met with Neskantaga Chief Peter Moonias earlier this week to outline the idea, but Martin said Moonias could not make any sort of a commitment on behalf of the Matawa First Nations, which is claiming territorial jurisdiction over the mining area. Martin said however there is growing support for Mushkegowuk.

Regardless, grand chief Martin said the idea is gaining momentum and more people are willing to listen to the idea. He said he expects mining executives at the Prospectors and Developers Convention next week will be interested in hearing the proposal, given the overall interest in the mining project.

The Ring of Fire is the name give to a huge deposit of chromite located in the McFauld’s Lake and Webequie area, about 600 kilometres north west of Timmins. Chromite is an important mineral element in manufacturing stainless steel. The Ring of Fire area could become the largest chromite mining site in North America, a venture measured in the tens of billions of dollars.

In January, Martin revealed the idea of creating a rail link across Mushkegowuk territory into the Ring Of Fire area with a two-pronged objective; one to bring in a rail link and secondly to bring in a high-voltage energy transmission line.

Read more

[Mike Tremblay] Self-confessed bush rat strikes gold – by Norm Tollinsky (Sudbury Mining Solutions Journal – February 13, 2014)

http://www.sudburyminingsolutions.com/

Mike Tremblay grew up in Chapleau, nine kilometres from the Borden Lake discovery, and couldn’t wait to get out. “I was getting to the point where I was going to be in trouble with the law if I didn’t figure out what I was going to do with myself, so I went to the guidance councellor and they figured I was the kind of guy who should be working outdoors.”

Forestry was out of the question, so Tremblay enrolled in a geology program at Sault College. In 1984, he was back in Chapleau and found work with Noranda on an outcrop sampling program. “They were redoing the highway at the time and blasted through an outcrop,” he recalled. “One of the guys I worked with mapped it and in his report called it vent proximal geology.

That was really interesting to me. Noranda’s idea was that it was good geology for a base metal deposit, but there was a little sniff of gold and I decided to follow it up.” A self-confessed “bush rat,” Tremblay received a series of grants through the Ontario Prospectors Assistance Program over the years.

“The OPAP grants of $10,000 allowed me to pay myself $100 a day, spend time near my home town and still do what I wanted to do on my own terms,” he said.

He first staked property in the Borden Lake area in 1987 and continued to work it for a total of 17 years between other jobs. He held the property from 1987 to 2000 and restaked it in 2006.

Read more

The Men Who Mine Volcanoes – by Kevin McElvaney (The Atlantic – February 25, 2015)

http://www.theatlantic.com/

Photos from two days in a sulfurous crater in Indonesia

Ijen is a quietly active volcano on the Indonesian island of East Java, and it is also a place of business. Local workers hike up the side of the mountain and down into the crater at the top to harvest its sulfur—a byproduct of the gas that escapes from the volcano’s vents and collects near the shores of an acidic lake at the crater’s center. The chemical is used in industry worldwide, from making matchsticks to vulcanizing rubber, but Ijen’s sulfur goes mostly to local factories, which use it to bleach sugar.

Ijen is one of the few volcanic sulfur mines remaining in the world: Mining an active volcano is dangerous work, and there are easier ways to get the chemical. I first became curious about the volcano after seeing it featured in the 2001 documentary War Photographer.

The film showed the protagonist James Nachtwey coughing furiously as he clicked his camera amid clouds of sulfur. Being a photographer myself, I wondered how the place would look in person and whether the conditions could be as bad as they seemed. It struck me as impossible that the slight-statured miners shown in the film could really carry heavy loads of sulfur up and down a mountain.

I left from Hamburg, Germany, and it took me three flights, one train ride, two motorcycle trips, and a long trek up the volcano before I saw the mine for the first time. A photographer I knew in Jakarta introduced me to a former miner named Imam, who served as my guide. I spent two days photographing the workers there.

Read more